From crisis to growth — listening, choosing, and executing

Save €1.6 million in three months – and why change can disappear again after all

Sometimes, as an interim director, you are asked to grow a company. Sometimes the reality is more urgent: without immediate intervention, the company may cease to exist within a few months.

In this case study, I was approached at the request of an external consultant by an international company that developed and sold health products. The organization possessed extensive knowledge, ambitious people, and an impressive number of ideas. Nevertheless, serious liquidity problems had arisen. If nothing changed, the company was expected to be unable to meet its obligations within a few months.

The question was clear: can you investigate what is really going on and indicate whether this company can still be saved?

Understand first, then intervene

I started with what is now called the Forward Scan at RAJ Forward. Not a lengthy theoretical study, but a sharp analysis of:

• the financial situation;

• the organizational structure;

• the product portfolio;

• the decision-making;

• commercial performance;

• the people in the workplace;

• and especially: the way in which ideas were converted into activities and costs.

It soon became clear that the company had no shortage of ideas. The problem was precisely that virtually every idea was actually implemented.

New health products were developed out of scientific interest and personal conviction. This was followed by campaigns, brochures, product development, and patent applications. However, the most important question was hardly asked:

Is there a clear customer who wants to buy this product and is willing to pay for it?

I once asked that question very simply to a number of employees in the marketing department:

Would you buy this product yourselves?

The honest answer was: no.

That one answer actually told the whole story.

Innovation without a market test becomes an expensive hobby

Over the years, the organization had developed more than a hundred products and applied for protection for a comparable number of inventions. That sounds impressive. But every product, every campaign, and every patent also entailed structural costs.

Patents had to be maintained. International specialists were paid. Products had to be developed, produced, and promoted. Books were also written and all kinds of new ideas were worked out.

A tremendous amount was happening, but too few of those activities were converted into revenue, customers, or return.

That is a risk I see in more companies: activity is confused with progress.

A full schedule does not automatically make a healthy business. A new product is not yet a commercial opportunity. A patent is only valuable when it protects something for which a market actually exists.

My starting point therefore became:

First demonstrable customer value and commercial potential. Only then invest further and, if worthwhile, protect with a patent.

From more than a hundred priorities to five choices

To restore the company's financial health, clear choices had to be made.

The international development budget was drastically reduced. The large patent portfolio was critically reviewed. Only products and intellectual property with a realistic commercial future remained a priority.

Ultimately, we narrowed our focus down to about five promising products.

That did not mean that all other ideas were bad. It meant that a company cannot distribute unlimited money, people, and attention across projects without proven market potential.

Strategy is not determining everything you could do.

Strategy is primarily daring to decide what you will no longer do for the time being.

The real problem was not in the figures

After the initial analysis, I was given the responsibility to actually implement the necessary changes. My workspace became close to that of the owner, and I was seen within the organization as the intended CEO.

During my further investigation, something stood out. On paper, it seemed as if many employees were underperforming. But when I spoke with them and observed how the organization operated, a different picture emerged.

The problem was not the quality of the people.

The problem lay in the culture.

As soon as the owner entered, the atmosphere changed. People fell silent, tensed up, and hardly dared to speak freely. Decisions were not made based on responsibility, but out of a desire to avoid mistakes and confrontations.

In a culture of fear, people eventually stop doing business. They no longer take initiative, share bad news too late, and carry out assignments that they themselves already suspect will not work.

You can hardly blame employees for that. It is often the logical consequence of years of leadership in which there is too little room for dissent, responsibility, and trust.

The solution turned out to be surprisingly simple.

Afterwards, people thought I had done something very special. That I apparently possessed an exceptional approach or a secret rescue plan.

The reality was much simpler:

I started listening.

Not only to the management, the advisors, and the figures, but especially to the people on the shop floor.

They knew exactly:

• which projects yielded no results;

• where unnecessary money was spent;

• which processes were duplicated;

• where responsibilities were unclear;

• which products were hardly sold;

• and which decisions had been postponed for years.

When employees realized that they were allowed to share what was really going on without fear, a tremendous amount of useful knowledge surfaced.

Therefore, I did not try to “save” the company from the top down. Together, we made visible what needed to change. Subsequently, we made clear decisions and implemented them.

From three buildings to one organization

The accommodation also turned out to be much larger and more expensive than necessary. The company operated from multiple large buildings on an extensive business park, whereas the employees and activities could have been perfectly well brought together in a single building.

By critically examining accommodation, international expenses, product development, patents, marketing projects, and organizational costs, space was quickly created.

Approximately €1.6 million was saved within three months.

But at least as important: the organization regained perspective. People started talking to each other again. Employees took responsibility, and fear cautiously gave way to trust.

The threat of bankruptcy was averted and the company was able to continue.

What happens if the interim manager leaves?

Successful change can also evoke resistance.

When employees are given more trust, costs are made visible, and long-standing habits are called into question, the position of the owner and his direct advisors also changes. Not everyone finds this pleasant.

After a few months, it was decided that others would lead the initiated change further. My assignment ended, and I laid down the conductor's baton.

That is part of interim management. You step in when needed, bring about change, and leave when the client decides.

Yet, in this case, there was a painful lesson.

Not long after my departure, I received signals that old patterns were returning. The distance between management and employees widened again. People became more cautious, and the culture hardened once more.

Months later, I heard that during a meeting, employees openly longed for the period when the organization was run in a human, almost familial way.

That is a nice compliment, but at the same time a terrible shame.

For when a company reverts to its old behavior, the results of the change eventually disappear as well.

Change is only successful when it continues to exist without you.

This assignment has taught me once again that a turnaround consists of different phases.

1. Scan

First, reality must become visible. Not as one hopes the organization functions, but as it actually functions.

2. Focus

Next, choices must be made. Which products, people, markets, and activities truly contribute to the future?

3. Execute

Next, action must be taken. Reduce costs, define responsibilities, determine commercial priorities, and actually implement decisions.

4. Sustain

Finally, the change must be anchored. New agreements, behavior, and responsibilities must become part of the enterprise so that the organization does not regress as soon as the interim manager leaves.

It is precisely that final phase that is often underestimated.

The most important lesson

A company rarely gets into trouble due to a single wrong decision. Usually, the situation arises from years of accumulating ideas, making insufficient choices, failing to discuss problems, and allowing costs to escalate without adequate revenue to offset them.

The solution therefore does not start with a complex model.

She starts with three simple things:

listen, choose and execute.

Listen to the people who work with reality every day. Choose only activities that can demonstrably create value. And consistently implement the necessary decisions.

But above all, don't forget to hold on to the change afterwards.

After all, an interim manager can help set the course, set the organization in motion, and temporarily hold the conductor's baton. Ultimately, the orchestra must continue playing the same music even without a conductor.

Is your company facing growth, change, or a difficult decision?

With the RAJ Forward Scan, we quickly and honestly provide a clear picture of where your organization stands, where opportunities are being lost, and which choices are necessary.

Not a thick report that disappears into a drawer, but a concrete analysis that provides direction for action.

Your business. Forward.